Amazon increases its Prime-eligible products by 10%, an analyst says

Amazon.com Inc. has made at least 19 million items available through its Prime shipping program, according to an estimate today from Robert W. Baird & Co. The private equity firm says that represents a 10% increase from the first quarter of the year.

The report says that roughly 10% of items on Amazon quality for Prime shipping.

Consumers who pay $79 a year to join Prime receive two-day shipping on eligible items plus streamed access to more than 25,000 TV shows and movies. The 8-year-old program has at least 10 million members, according to the report, authored by R.W. Baird analysts Colin Sebastian and Gregor Schauer. Amazon does not disclose how many consumers belong to Prime. Sebastian spoke on Amazon’s investment in retail technology at the recent Internet Retailer Conference & Exhibition in Chicago.

Amazon Marketplace seller Kat Simpson, owner of shoe and accessories retailer Kat’s Closet, and online marketing expert Janelle Elms, president of OSI Rock Stars, also estimated that Amazon Prime has about 10 million members when they co-presented at a session on selling through Amazon at IRCE 2013. “If you sell on Amazon, use Prime,” Simpson said.

Amazon is No. 1 in the Internet Retailer 2013 Top 500 Guide. Amazon does not generally release detailed numbers about Prime, and did not respond to a request for comment about the Baird report.

The report says Amazon has ample room to grow Prime. “We view the nearly 90% of products not currently Prime eligible as a key motivator for Amazon to expand the appeal of the service,” the authors write. “Loyal [Prime] shoppers typically order three to four times more units as non-members, with a natural inclination toward buying Prime-eligible products.”

A report earlier this year from financial data firm Morningstar Inc. and Consumer Intelligence Research Partners LLC estimated that the average Prime member spent $1,200 annually (that includes the $79 membership fee) compared with $600 for the average non-Prime Amazon customer.

The Baird report also estimated the overall percentage increase in the types of products sold by Amazon. Measured by gains from the first quarter of 2013 to the second quarter of 2013, the report says that cell phones and accessories, patio, lawn and garden furniture and industrial and scientific items had the largest percentage gains. By contrast, grocery and gourmet foods, clothing and accessories and music had the largest declines.